PACKAGES ?· Note Note SHARE CAPITAL AND RESERVES FIXED CAPITAL EXPENDITURE Authorised capital Operating…

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  • 2001 2000 2001 2000Note Note

    SHARE CAPITAL AND RESERVES FIXED CAPITAL EXPENDITURE

    Authorised capital Operating fixed assets 13 2,494,704 2,452,537

    60,000,000 (2000: 60,000,000) ordinary shares of Rs 10 each 600,000 600,000 Assets subject to finance lease 14 148,500 159,500

    Capital work-in-progress 15 445,143 257,381

    Issued, subscribed and paid up capital 3,088,347 2,869,418

    47,537,080 (2000: 45,273,410) ordinary shares of Rs 10 each 3 475,371 452,734

    Reserves 4 2,020,625 1,832,262 LONG-TERM INVESTMENTS 16 515,530 459,616

    Unappropriated profit 602 640

    2,496,598 2,285,636 LONG-TERM LOANS, DEPOSITS AND

    NON PARTICIPATORY REDEEMABLE OTHER RECEIVABLES 17 4,293 349,394

    CAPITAL - SECURED 5 150,000 250,000

    RETIREMENT AND OTHER BENEFITS 18 16,619 16,222

    NON PARTICIPATORY REDEEMABLE

    CAPITAL - UNSECURED 6 850,000 - CURRENT ASSETS

    LIABILITIES AGAINST ASSETS SUBJECT 7 70,400 105,600 Stores and spares 19 263,244 277,781

    TO FINANCE LEASE Stock-in-trade 20 761,796 629,719

    Trade debts 21 596,026 463,807

    LONG TERM LOANS AND OTHER Loans, advances, deposits, prepayments and other receivables 22 350,951 332,944

    PAYABLES - SECURED 8 10,238 536,043 Cash and bank balances 23 558,181 512,679

    2,530,198 2,216,930

    DEFERRED LIABILITIES 9 534,265 547,769

    CURRENT LIABILITIES

    Current portion of

    - Redeemable capital 5 100,000 100,000

    - Liabilities against assets subject to finance lease 7 35,200 35,200

    - Long term loans and other payables 8 541,321 620,927

    Finances under mark up arrangements - secured 10 557,146 786,082

    Creditors, accrued and other liabilities 11 595,902 553,776

    Proposed dividend 213,917 90,547

    2,043,486 2,186,532

    CONTINGENCIES AND COMMITMENTS 12

    6,154,987 5,911,580 6,154,987 5,911,580

    The annexed notes form an integral part of these accounts.

    Chief Executive Director

    PACKAGES LIMITED

    (Rupees in thousand)

    BALANCE SHEET AS AT DECEMBER 31, 2001

    (Rupees in thousand)

  • PACKAGES LIMITED

    PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2001

    Year to Six months December to December

    31, 2001 31, 2000Note (Rupees in thousand)

    Local sales 5,128,875 2,231,625

    Export sales 28,941 6,408

    5,157,816 2,238,033

    Less: Sales tax and excise duty 712,120 307,612

    Commission 5,231 1,627

    717,351 309,239

    4,440,465 1,928,794

    Less: Cost of goods sold 24 3,549,082 1,574,518

    Gross profit 891,383 354,276

    Selling, administration and general expenses 25 417,356 168,688

    Operating profit 474,027 185,588

    Other income 26 406,243 196,404

    880,270 381,992

    Financial charges 27 267,049 123,551

    Other charges 28 98,780 16,514

    365,829 140,065

    Profit before taxation 514,441 241,927

    Provision for taxation 29 89,562 48,686

    Profit after taxation 424,879 193,241

    Unappropriated profit brought forward 640 583

    Available for appropriation 425,519 193,824

    Appropriations:

    - Transferred to general reserve 211,000 80,000

    - Transferred to reserve for issue of bonus shares - 22,637

    - Proposed dividend - Rs 4.5 per share (2000: Rs 2 per share) 213,917 90,547

    424,917 193,184

    Unappropriated profit carried forward 602 640

    Earnings per share 38 8.94 4.07

    The annexed notes form an integral part of these accounts.

    Chief Executive Director

  • PACKAGES LIMITED

    CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2001

    Year to Six months December to December

    31, 2001 31, 2000Note (Rupees in thousand)

    Cash flow from operating activities

    Cash generated from operations 36 763,052 330,846 Financial charges paid (291,973) (119,380) Vacation pay paid (2,601) (972) Taxes paid (153,071) (54,422)

    Net cash inflow from operating activities 315,407 156,072

    Cash flow from investing activities

    Fixed capital expenditure (611,711) (220,659) Net decrease in long-term loans, deposits and other receivables 345,101 124,664 Sale proceeds of fixed assets 7,267 4,663 Dividend received 307,027 143,104 (Increase) in long term investments (102,285) -

    Net cash (outflow)/inflow from investing activities (54,601) 51,772

    Cash flow from financing activities

    Proceeds from redeemable capital, long term loan, finance lease and other payables 865,516 78,636 Repayment of redeemable capital, long term loans and other payables (720,927) (384,581) Payment of finance lease liabilities (35,200) (17,600) Dividend paid (95,757) (166,743)

    Net cash inflow/(outflow) from financing activities 13,632 (490,288)

    Net increase/(decrease) in cash and cash equivalents 274,438 (282,444) Cash and cash equivalents at the beginning of the year (273,403) 9,041 Cash and cash equivalents at the end of the year 37 1,035 (273,403)

    The annexed notes form an integral part of these accounts.

    Chief Executive Director

  • PACKAGES LIMITED

    STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2001

    Rupees in thousand

    Reserve

    for issue Unappro-

    Share Share of bonus General priated

    capital premium shares reserve profit Total

    Balance as on June 30, 2000 411,577 203,589 41,157 1,526,036 583 2,182,942

    4,115,764 ordinary shares of Rs 10 each

    issued as fully paid bonus shares 41,157 - - - - 41,157

    Nominal value of bonus shares issued - - (41,157) - - (41,157)

    Net profit for the period - - - - 193,241 193,241

    Transferred from profit and loss account - - - 80,000 (80,000) -

    Transferred to reserve for

    issue of bonus shares - - 22,637 - (22,637) -

    Dividend - final Rs 2 per share - - - - (90,547) (90,547)

    Balance as on December 31, 2000 452,734 203,589 22,637 1,606,036 640 2,285,636

    2,263,670 ordinary shares of Rs 10 each

    issued as fully paid bonus shares 22,637 - - - - 22,637

    Nominal value of bonus shares issued - - (22,637) - - (22,637)

    Net profit for the year - - - - 424,879 424,879

    Transferred from profit and loss account - - - 211,000 (211,000) -

    Proposed dividend - Rs 4.5 per share - - - - (213,917) (213,917)

    Balance as on December 31, 2001 475,371 203,589 - 1,817,036 602 2,496,598

    Chief Executive Director

  • PACKAGES LIMITED

    NOTES TO THE ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2001

    1. Legal status and nature of business

    The company is incorporated in Pakistan and is listed on Karachi, Lahore and Islamabad Stock Exchanges. It is principallyengaged in manufacture and sale of paper, paperboard, packaging materials and tissue products.

  • 2. Summary of significant accounting policies

    2.1 Accounting convention

    2.2 Taxation

    Current

    Deferred

    The Company accounts for deferred taxation, using the liability method, on all major timing differences.

    The accounts have been prepared under the historical cost convention, modified by capitalisation of exchange differencesreferred to in note 2.8.

    These accounts have been prepared in accordance with the requirements of Companies Ordinance, 1984 and InternationalAccounting Standards (IAS), as applicable in Pakistan in all material respects.

    The charge for current taxation is based on taxable income at the current rates of taxation after taking into account tax creditand tax rebates realisable, if any.

  • 2.3 Fixed capital expenditure and depreciation/amortisation

    Tangible- Plant and machinery 6.25 % to 20%- Buildings 2.5% to 10%- Other equipment 10% to 33.33 %- Furniture and fixtures 10% to 20 %- Vehicles 20%

    Intangible - Computer software and SAP Enterprise Resource Planning System (ERP) 33.33%

    2.4 Assets subject to finance lease

    Depreciation/amortisation on additions to fixed assets is charged from the month in which an asset is acquired or capitalisedwhile no depreciation/amortisation is charged for the month in which the asset is disposed off.

    Assets acquired under a finance lease are amortised over the useful life of the asset on a straight line method at the ratesgiven in note 2.3. Amortisation of leased assets is charged to profit.

    The net exchange difference relating to an asset, at the end of each year, is amortised in equal installments over itsremaining useful life. Major renewals and improvements are capitalised.

    Assets subject to finance lease are stated at the lower of present value of minimum lease payments under the leaseagreements and the fair value of the assets. The related obligations of the lease are accounted for as liabilities.

    Amortisation on additions to leased assets is charged from the month in which an asset is acquired while no amortisation ischarged for the month in which the asset is disposed off.

    Operating fixed assets except land are stated at cost less accumulated depreciation / amortisation. Land and capital work-in-progress are stated at cost. Cost in relation to certain plant and machinery signifies historical cost and exchange differencesreferred to in note 2.8 and interest etc. in note 2.10.

    Depreciation/amortisation on all operating fixed assets is charged to profit on the straight line method so as to write off thehistorical cost of an asset over its estimated useful life at the following annual rates:

  • 2.5 Long-term investments

    2.6 Stores and spares

    2.7 Stock-in-trade

    Materials in transit are stated at cost comprising invoice values plus other charges paid thereon.

    Usable stores and spares are valued principally at moving average cost, while items considered obsolete are carried at nilvalue. Items in transit are valued at cost comprising invoice values plus other charges paid thereon.

    Stock of raw materials, except for those in transit, work-in-process and finished goods are valued principally at the lower ofaverage cost and net realisable value. Cost of work-in-process and finished goods comprises cost of direct materials, labourand appropriate manufacturing overheads.

    These are stated at lower of cost and market value determined on a portfolio basis. Provision is made for permanentdiminution in the value of any investment.

    Net realisable value signifies the estimated selling price in the ordinary course of business less costs necessarily to beincurred in order to make a sale.

  • 2.8 Foreign currencies

    All assets and liabilities in foreign currencies are translated at exchange rates prevailing at the balance sheet date.

    All other exchange differences are included in profit currently.

    2.9 Staff retirement benefits

    The main features of the schemes operated by the Company for its employees are as follows:-

    (a)

    - Discount rate 12 percent per annum.- Expected rate of increase in salary level 9.87 percent per annum.- Expected rate of return 12 percent per annum.

    (b) There is an approved contributory provident fund for all employees.

    Retirement benefits are payable to staff on completion of prescribed qualifying period of service under these schemes.

    The company's policy with regard to actuarial gains/losses is to follow minimum recommended approach underIAS 19 (revised 1998).

    All the executive staff participate in an approved funded defined benefit pension plan. In addition, there is anapproved funded defined benefit gratuity plan for all employees. Monthly contributions are made to thesefunds on the basis of actuarial recommendation at the rate of 13 percent per annum of basic salaries for pensionand 8.33 percent per annum of basic salaries for gratuity. The latest actuarial valuation for the pension andgratuity schemes was carried out as at December 31, 2001. The actual returns on plan assets during the yearwere Rs 45.086 million and Rs 36.106 million for the pension fund and gratuity fund respectively.

    The future contribution rates of these plans include allowances for deficit and surplus. Projected unit creditmethod, using the following significant assumptions, is used for valuation of these schemes:

    Exchange differences on loans utilised for the acquisition of plant and machinery are capitalised upto the date ofcommissioning of the assets.

  • 2.10 Mark up, interest, profit and other charges

    2.11 Revenue recognition

    Mark up, interest, profit and other charges on redeemable capital and long-term liabilities are capitalised upto the date ofcommissioning of the respective plant and machinery, acquired out of the proceeds of such redeemable capital and long-term liabilities. All other mark up, interest, profit and other charges are charged to income.

    Revenue is recognised on despatch of goods or on the performance of services except for management fees which arerecognised on receipt. Dividend income on equity investments is recognized as income when the right of receipt isestablished.

  • 2001 2000(Rupees in thousand)

    3. Issued, subscribed and paid up capital

    11,260,868 ordinary shares of Rs 10 each fully paid in cash 112,609 112,609 148,780 ordinary shares of Rs 10 each issued as...